Western Digital Raises Quarterly Dividend 20.0% to $0.15

Western Digital raised its quarterly dividend 20.0% to $0.15 a share from $0.125. The shares traded ex-dividend on June 5, 2026. The new quarterly rate represents an annual dividend of $0.60 a share.

Why the dividend changed

Western Digital tied the increase to improved operating performance and confidence in the durability of its business. In fiscal third-quarter results, revenue reached $3.34 billion and rose 45% from a year earlier, while GAAP gross margin reached 50.2%. Chief Executive Irving Tan said the company delivered growth across all end markets and expanded gross and operating margins. He cited “confidence in the durability of our business” when announcing the higher dividend. Western Digital fiscal third-quarter results

Cash generation provided additional support. Western Digital reported $1.12 billion of operating cash flow and $978 million of free cash flow for the quarter. Its fiscal fourth-quarter outlook called for revenue growth of 36% to 44% and a non-GAAP gross margin of 51% to 52%. The increase therefore accompanied stronger results and guidance rather than a change in payment frequency. Western Digital fiscal third-quarter results

The dividend also belongs to a broader post-separation capital-allocation program. Western Digital completed the separation of its flash business into Sandisk on February 21, 2025, leaving Western Digital focused on hard-disk drives. The board adopted a quarterly cash-dividend program later in 2025. The separation helps explain why the recent dividend record looks like a reset rather than an uninterrupted continuation of the company’s earlier payments. Western Digital Form 10-Q

Share repurchases remained the larger capital-return channel. Western Digital repurchased 2.9 million shares for $752 million during the fiscal third quarter and had $3.93 billion of authorization remaining at quarter-end. Management has said its capital-allocation strategy balances reinvestment, debt reduction and shareholder returns. Western Digital Form 10-Q

Dividend track record

The recent payment sequence shows two increases after the dividend’s post-separation restart. Western Digital paid $0.10 on the June 4, 2025, and September 4, 2025, ex-dividend dates, followed by $0.125 on December 4, 2025, and March 5, 2026. The rate then increased to $0.15 for the June 5, 2026, and September 8, 2026, ex-dividend dates. Western Digital dividend history

The longer record is less consistent. Two payments in 2020 totaled $0.76 a share, while three payments in 2025 totaled $0.33, a decline of 57.0%. The last annual cut occurred in 2025, and Western Digital has no current consecutive-year dividend-growth streak. The two recent quarterly increases establish momentum within the restarted program, but they do not yet amount to annual growth continuity.

Is the dividend covered?

The dividend consumes 2% of earnings, indicating substantial accounting-earnings coverage at the current rate. That low payout leaves a large earnings buffer between current profit and the cash distribution, although hard-drive demand, pricing and capital requirements can make results cyclical.

SmarterDividends rates the dividend C, with a safety score of 58. That places it in the borderline range of 50-65. The grade means current earnings coverage is strong, but the short post-separation payment record and past interruption keep the dividend from carrying a stronger safety assessment.

Yield and valuation

At a share price of $460.62, the $0.60 annual dividend produces a forward yield of 0.13%. That is well below the Technology sector median forward yield of 1.38%. The modest yield also follows a 193.8% gain in the share price over one year, which reduced the income return relative to the market value of each share.

SmarterDividends estimates fair value at $950.05 and assigns an undervalued verdict, corresponding to 115% upside to that estimate. The fair-value result is a valuation reference, not a forecast. The dividend remains a small component of the stock’s total-return profile at its current yield.

What to watch

Western Digital’s subsequent fiscal fourth-quarter report showed revenue of $3.75 billion, operating cash flow of $1.39 billion and free cash flow of $1.28 billion. Management guided for fiscal first-quarter 2027 revenue growth of 42% to 49%. Those results and the next update on data-center demand, margins and cash generation will provide the operating context for the next dividend decision. Western Digital fiscal fourth-quarter results

The board retains discretion to modify, suspend or cancel the dividend program. Western Digital says future declarations will depend on its financial position, operating results, cash flows, capital requirements and financing restrictions. The next capital-allocation update will also show how management balances the dividend with repurchases, debt reduction and investment in the hard-drive business. Western Digital Form 10-Q